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New Orleans Condos- What do condo fees Cover? Most often asked question? Who pays the Insurance?

     I get this important question asked about condos very often.  Who pays for the homeowners insurance?  Many buyers are surprised to learn that the condo fees cover property and casualty insurance on the individual condo and common areas.  I always think people know this but lets talk about it a little more in detail.  In order to get a loan from the lender, they will  make sure the condos have the proper insurance to protect their investment.  If the condo is in a flood zone then it is required to have flood insurance as well. 

     The highest deductible that most lenders will allow is 10% with some reserves to back that number up.  Many complexes have a 5% deductible.  They also look at reserves and pending lawsuits to make sure their investment is safe.

    The condo fees do not cover your contents and those policies are easy to get often costing less than $500 per year do up to 40k of coverage.  Rarely do I hear of people using this but its better to be safe than sorry. 

    The insurance is often the major item in the condo fees. In small associations it is many times over 50% of the fee.  The next largest item in condo budgets is the upkeep of the property.

      The larger the condo association the more people are paying for the common elements and generally the fees tend to be lower.  Other things that are normally in the fees are water, common electricity, security, pool maintenance, clean up, termite contracts, landscaping, salaries, elevators, condo reserves and management fees.  Most condos I sell are managed by a professional often on site for the larger units and off site for the smaller units.  The smaller units are managed by the owners.

    The fees are generally based on the size of the unit when the condo was originally old.  Condo fees go up when costs go up or the majority of owners want to add more services.  As a member  your vote and voice counts.  Making sure the complex in top notch shape is the best way to protect your values.  I do see where this is not done and the value craters as no one wants to live there.

 

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Eric Bouler Realtor
Gardner Realtors
Metairie - New Orleans, La. USA